Performance management and appraisal Chapter 8 © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–1

Employee Engagement for a committed Workforce Level of commitment workers make to their employerLevel of commitment workers make to their employer Seen in their willingness to stay at the firm and to go beyond call of dutySeen in their willingness to stay at the firm and to go beyond call of duty Found in employees’ minds, hearts, and handsFound in employees’ minds, hearts, and hands 8-2

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–3 The Nature of Performance Management Effective Performance Management System Make clear what the organization expects Provide performance information to employees Document performance for personnel records Identify areas of success and needed development

Performance Management (PM) Goal-oriented process ensuring processes are in place to maximize productivity at employee, team and organizational levelsGoal-oriented process ensuring processes are in place to maximize productivity at employee, team and organizational levels Close relationship between incentives and performance.Close relationship between incentives and performance. Dynamic, ongoing, continuous processDynamic, ongoing, continuous process Each part of the system is integrated and linked for continuous organizational effectivenessEach part of the system is integrated and linked for continuous organizational effectiveness 8-4

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–5 Performance Management versus Performance Appraisal Performance Management Processes used to identify, encourage, measure, evaluate, improve, and reward employee performance Performance Appraisal The process of evaluating how well employees perform their jobs and then communicating that information to the employees

Uses of Performance Appraisal Human resource planningHuman resource planning Recruitment and selectionRecruitment and selection Training and developmentTraining and development Career planning and developmentCareer planning and development Compensation programsCompensation programs Internal employee relationsInternal employee relations Assessment of employee potentialAssessment of employee potential 8-6

Performance Appraisal Process External Environment Internal Environment Performance Appraisal Process External Environment Internal Environment 8-7 Identify Specific Performance Appraisal Goals Establish Performance Criteria (Standards) and Communicate Them To Employees Examine Work Performed Appraise the Results Discuss Appraisal with Employee

Characteristics of Effective Appraisal System Job-related criteriaJob-related criteria Performance expectationsPerformance expectations StandardizationStandardization Trained appraisersTrained appraisers Continuous open communicationContinuous open communication Performance reviewsPerformance reviews Due processDue process 8-8

Continuous Open Communication Employees need to know how well they are performingEmployees need to know how well they are performing Good appraisal system provides highly desired feedback on continuing basisGood appraisal system provides highly desired feedback on continuing basis Should be few surprises in performance reviewShould be few surprises in performance review 8-9

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–10 FIGURE 10–1 Performance Management Linkage

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–11 FIGURE 10–2 Components of Performance Management

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–12 Global Cultural Differences in Performance Management Uncommon for managers in other cultures to rate employees or to give direct feedback.Uncommon for managers in other cultures to rate employees or to give direct feedback. Younger subordinates do not engage in joint discussions with their managers due their high respect for authority and age.Younger subordinates do not engage in joint discussions with their managers due their high respect for authority and age. Criticism from superiors is viewed as personally devastating rather than as useful feedback.Criticism from superiors is viewed as personally devastating rather than as useful feedback.

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–13 FIGURE 10–3 Components of a Performance-Focused Culture

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–14 Identifying and Measuring Employee Performance Quantity of output Timeliness of output Quality of output Presence/ attendance on the job Efficiency of work completed Effectiveness of work completed Performance Criteria for Appraisals

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–15 Identifying and Measuring Employee Performance (cont’d) Job DutiesJob Duties  Important elements in a given job as identified from job descriptions.  What an organization pays an employee to do.

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–16 FIGURE 10–4 Types of Performance Information

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–17 Performance Appraisals Benefits of “GOOD” Performance AppraisalsBenefits of “GOOD” Performance Appraisals  Enhanced Employee Engagement  Increased operational competence  Enhanced corporate growth  Heightened transformational processes and performance  Provide answers to a wide array of work-related questions of how to improve job performance

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–18 FIGURE 10–6 Uses for Performance Appraisals

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–19 Decisions About the Performance Appraisal Process Designing Appraisal Systems Appraisal Responsibilities Informal vs. Systematic Processes Timing of Appraisals

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–20 Who Conducts Appraisals? Supervisors rating their employees Employees rating their superiors Multisource or 360° feedback Outside sources rating employees Team members rating each other Employees rating themselves Sources of Performance Appraisals

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–21 FIGURE 10–9 Multisource Appraisal

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–22 Team/Peer Rating AdvantagesDisadvantages Helps improve performance of lower-rated individuals Peers have opportunity to observe other peers Peer appraisals focus on individual contributions to teamwork and team performance Can negatively affect working relationships Can create difficulties for managers in determining individual performance Organizational use of individual performance appraisals can hinder the development of teamwork

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–23 FIGURE 10–11 Sample Terms for Defining Standards

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–24 FIGURE 10–13 Forced Distribution on a Bell-Shaped Curve

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–25 Training Of Managers And Employees in Performance Appraisal Appraisal process and timing Performance criteria and job standards Common rating errors Compensation reviews Positive and negative feedback Training and development goals Performance Appraisals Training Topics

© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.10–26 Performance Management System (PMS) Consistent with the strategic mission Beneficial as a development tool Effectively documents performance Viewed as fair by employees Useful as an administrative tool Is legal and job related Effective Performance Management System